BFSI Summit 2023: Steady growth to continue, CEOs of public banks say


The steady growth in the public sector banks (PSBs) will likely continue in the next few years, heads of several public banks said in a panel discussion at the Business Standard BFSI Insight Summit 2023 in Mumbai on Tuesday.

In a discussion on “Are The Good Days Here To Stay?” Ashwani Kumar, managing director and chief executive officer (MD and CEO) at UCO Bank, said that the growth will be there due to the budgetary push by the government, the G20 Summit and the production-linked incentive (PLI) scheme.

“If you look at the high-frequency indicators like GST collections, e-way bill generation, fastag collections, and the order book of PSUs which is around Rs 7 trillion, the growth momentum is likely to continue,” he said.

With growth, there will be good credit growth, he added.

Adding to this, K Satyanarayana Raju, MD and CEO at Canara Bank, said that two decades ago, PSBs were struggling to get investments in technology and meet the customer requirements. But now things are changing.

“In the last 8 years, there has been a change in the working of PSBs. Now PSBs have come up in both technology and quality. They know what clients require and are gaining confidence from the public,” he said.

“The way it is moving, people will come back because of the sovereignty guarantee,” he added.

He also said that the balance sheet of every PSB is now cleaned well. “The profits have come after 7-8 years of hard work. Operating profits have been growing very well,” he said. “Steady growth will continue for years together.”

CS Setty, managing director at State Bank of India (SBI) said that profit is a derivative number and is a combination of many things.

“Today, PSBs have a better appreciation of risk both at micro and macro level. The board understands micros and macros better. There is better risk assessment,” he said, adding that the twin balance sheet problem has become a twin balance sheet advantage.

“The contribution of the board, regulator and Centre will hopefully sustain the growth for longer,” he added.

On the competition for deposits between the banks, Setty added that the fight would continue for some more time.

“The banking sector has seen much higher competition for deposits in the past but it could be handled as credit growth was not that intense. Today it’s aggravated as credit growth is significant. The requirement for liabilities is growing. Also, a lot of banks would like to keep their market share intact,” he said.

He added that whenever the PSBs evaluate their retail books, they must not have a broad brush approach. Interest rates will have an impact on the ability to pay EMIs.

“All the banks now have the flexibility of elongation of their instalments or increase their repayment obligations. So there should be no major stress,” Raju added.


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